TikTok announced on Thursday that it has formally closed a deal to spin off its U.S. operations into a new majority‑American company — a move crafted to keep the app running in the United States after years of political fights over its Chinese ownership.
The new firm, TikTok USDS Joint Venture LLC, will be controlled by a group of investors that includes Oracle, private‑equity firm Silver Lake and Abu Dhabi’s MGX. ByteDance, TikTok’s Beijing‑based parent, will retain a minority stake of 19.9%. Adam Presser, who ran operations and trust & safety at TikTok, will lead the new venture as CEO, and a seven‑member board — a majority of whom are U.S. citizens — will oversee the company.
What changed today
Under the deal, several of the safeguards that U.S. officials demanded are being put in place: U.S. user data and the recommendation algorithm will be hosted inside Oracle’s American cloud infrastructure, and the company says the recommendation system will be retrained and tested on U.S. user data. TikTok framed the move as preserving the “global TikTok experience” for American creators while creating an operable, U.S.‑centric business that can satisfy national security concerns.
Investors named in company materials include Oracle as a managing investor (Larry Ellison has been publicly linked to the effort), Silver Lake and MGX, plus several other backers such as an investment firm tied to Michael Dell. The new board reportedly includes figures from Silicon Valley and finance. ByteDance’s sub‑20% stake and that seven‑member governance structure are central to the deal’s claim that operational control will be American.
The agreement follows a long, punctuated history: Congress passed a law in 2024 that would have banned TikTok unless ByteDance divested its U.S. operations, the Supreme Court upheld that law in early 2025, and subsequent executive actions delayed enforcement while the company, U.S. officials and prospective buyers negotiated. This closure appears to be the culmination of those talks and intergovernmental approvals.
Why this matters — and why questions remain
For millions of creators and advertisers the immediate relief is simple: the app stays live in the U.S., user‑follower relationships remain intact, and businesses that had started to rely on short‑form video won’t have to rebuild from scratch. Politically, it allows the administration to show movement on a national security issue that had bipartisan attention.
But the contours of the safeguards are what everyone will be watching. The company says there will be comprehensive data protections, algorithm security, content moderation and software assurances for U.S. users — language meant to reassure lawmakers and security reviewers. Hosting the algorithm and U.S. user data in Oracle’s cloud addresses one technical worry, but it does not erase deeper debates about who ultimately influences content ranking, how cross‑border interoperability will work, or how enforceable those pledges are over time.
Experts and lawmakers will likely push for independent audits, detailed contracts and continuing oversight. Even with ByteDance capped at 19.9%, critics will point to subtle levers — technical dependencies, shared engineering knowledge, or future business arrangements — that could undermine strict separation. The joint venture says interoperability will allow U.S. users to participate in the global TikTok ecosystem, which raises further questions about how data and recommendations will be segmented.
There are broader industry implications too: where a platform places its algorithm and whose cloud infrastructure it uses now factors into national security debates and commercial strategy. The deal underscores how data sovereignty and cloud architecture are becoming political issues in addition to technical ones — a theme we’ve seen elsewhere as governments and companies tussle over AI and data handling (for context on privacy and AI debates, see the coverage of Gemini’s Deep Research and privacy concerns). And as countries explore new ways to secure critical infrastructure — even speculative projects to relocate data centers — the location and governance of computing matter more than ever (see efforts to rethink data‑center geography).
The politics and the money
President Donald Trump’s administration played an active role in shepherding the proposal; earlier executive orders paused enforcement of the 2024 law while a solution was negotiated. The deal’s valuation for the U.S. business has been discussed in public reporting in the neighborhood of low‑double billions, though precise terms beyond ownership percentages were not disclosed in full detail by the company at announcement.
For the investors involved, the pitch is twofold: buy into a platform with hundreds of millions of U.S. users and wrap it in governance and infrastructure that reduces geopolitical risk. For creators, the calculus will be simpler: can this structure preserve reach, monetization and creative tools without new constraints? Many will judge the deal by how quickly and transparently the promised technical and governance changes appear in practice.
Open questions
There is no shortage of unknowns. Will independent cybersecurity audits be made public? How will U.S. regulators enforce the restrictions promised in corporate statements? Can the joint venture keep global interoperability without sharing data or algorithmic logic that compromises the separation it claims? And perhaps most politically combustible: if future leadership or market pressure alters the governance model, what safeguards are truly durable?
The company says the new structure is a durable solution aimed at balancing national security with the economic and cultural value of TikTok’s U.S. user base. The next months will tell whether that balance holds — or whether a new round of scrutiny, litigation or political pressure reopens the debate.